Spurrier Corporation’s taxable income is $50,000, and its tax preference items and positive adjustments for the alternative minimum tax (AMT) are $100,000.
a. Is Spurrier subject to the AMT (assume the corporation is not excluded from the AMT under the small business exception)? If so, what additional taxes (if any) are owed because of the AMT rules?
b. What AMT reporting requirements must Spurrier satisfy in preparing its tax return?
c. Can Spurrier avoid paying the corporate AMT by electing to pay more dividends to its shareholder?